Question

12. (a) Find out the minimum stock level, maximum stock level and
ordering level from the following particulars:
Minimum Consumption = 100 units per day
Maximum Consumption = 175 units per day
Normal Consumption = 125 units per day
Re-order quantity = 1,500 units
Minimum period for receiving goods = 7 days
Maximum period for receiving goods = 15 days
Normal period for receiving goods = 10 days
(OR)​

Answer 1

1. Ordering level / reorder level :-

= Maximum usage /consumption × maximum reorder period

175 units per day × 15 days = 2625 units.

2. calculation of minimum stock level :-

Minimum stock level = reorder level - (normal consumption × normal re order period)

2625 - ( 125 units per day × 10 days) = 2625 - 1250 =1375 units.

3. Calculation of maximum stock level =

Re order level + re ordering quantity - (minimum consumption × minimum reorder period) .

2625 units + 1500 units - (100 units × 7 days)

4125 units - 700 units = 3425 units.

Thanks